Effect from electricity price on inflation was less than 1 pct in January

Photo: Uwe Gnadenteich

The rate of inflation in Estonia in January was lower than in any other month in two years and the effect from the higher price of electricity on it was smaller than one percent, Finance Minister Jürgen Ligi said.

"While it definitely was unpleasant and many families felt very uncomfortable about it, it isn't as bad an one might think judging by what people say when they take the floor," Ligi said at the government press conference Thursday speaking about criticism related to the opening of the electricity market.

"It's especially bad to hear in this discussion people talk about electricity excise. The effect from excise on the consumer basket is 0.14 percent," he said. "There's a lot of misleading on that subject, and excise is not something that goes into the waste bin, it's used to finance social policy, which should alleviate the impact on the weakest."

The minister emphasized that on an open market competition is the main thing that influences the price.

According to figures by Statistics Estonia, electricity was 26.9 percent more expensive in January 2013 than in the same month a year ago, accounting for two thirds of the increase in housing expenditures for the period. The consumer price index (CPI) rose 3.4 percent year on year ago and nearly half of the increase was a result of higher housing costs.

Month on month, CPI rose 0.7 percent. Compared to December, the dynamics of the consumer price index was influenced the most by electricity, which became 23.6 percent more expensive.